I honestly don't know why so many people care where a company starts. For example, Microsoft started in Redmond. Rovio isn't even in the US. Notch is a Swede.<p>For what it's worth, people should really look at their product and build it wherever they can. Screen sharing and remote chatting for 4-5 hours a day anywhere has helped. As long as most everyone is within reach of 3 hours (basically, anywhere in the continental US), it's possible. I'm not bold enough to try international borders merely to keep payroll compliance, legal liability, and agreements effective, but I'm sure it can work. Just ask free software projects how that's working over Github.<p>In fact, I find it beneficial not to have my employees in a startup hub so that companies like Google can't poach them.<p>After all, a location is just a location. If you're an Internet business, you don't actually meet up with your customers when you have a problem.
The major difference I see between starting a company somewhere in the USA versus outside of the US (at least from my sheltered Australian perspective) is access to an engaged market.<p>Not to mention that the risk culture outside of the US is very different to what most American born entrepreneurs appreciate.<p>So while starting a company outside of a US tech-hub is definitely possible (and makes sense for many things) a web-startup gains some value from being surrounded by other complementary startups. It seems to spawn a culture whereby engineers at one firm are friends with engineers at another - allowing natural partnerships to form. Silicon Valley seems to attractive like people, accelerating the process.<p>In Australia, software engineers are hard to find and at least in Sydney - the best engineers get absorbed by the likes of the banks, Google, Atlassian et al.<p>Summing up, while its great that you can pull of starting in Philly (or anywhere else) - its probably still easier to start a company in Silicon Valley because of its start-up gravitational pull.
My start-up just graduated from this:<p><a href="http://techcrunch.com/2011/12/06/dreamit-graduates-15-startups-in-philly-including-5-minority-led-companies/" rel="nofollow">http://techcrunch.com/2011/12/06/dreamit-graduates-15-startu...</a><p>10 of these companies have decided to stay here in Philly, at least for the short term, and significantly <10 (not sure the exact number) were from here to begin with.<p>My personal opinion is that Philly is a pretty good place to do a start-up (for similar reasons as the OP), and the Philly tech scene doesn't get as much due as it should.